10/13/2009 @ 4:45PM

Nokia's PC Plans

Nokia
wants to make one thing clear: it’s serious about the PC industry.

When the Finnish mobile technology giant announced its first netbook, the “Booklet 3G” in late August, skeptics assumed the device was an experiment and would have limited distribution. On Tuesday,
Nokia
sought to prove them wrong by announcing the U.S. retailer (
Best Buy
) and carrier (
AT&T
) for the netbook, which will be in Best Buy stores by mid-November. Nokia also said it plans to develop similar devices in the future.

“Our typical approach when we introduce products is to build a portfolio of them,” Mark Louison, Nokia’s president of North America, told Forbes at the company’s New York press conference. “This is a space we absolutely believe in.”

Nokia’s confidence is striking given the crowded netbook market in which traditional PC makers such as Acer,
Dell
and AsusTek dominate. Louison contends that Nokia brings a “fresh perspective” to the industry. Like a smart phone, the Booklet has built-in 3G mobile broadband and global positioning system (GPS) and a long battery life (up to 12 hours). Nokia is also baking some mobile software and services, like its Ovi Maps, into the Booklet.

“Nokia wanted to do something different,” notes Glenn Lurie, AT&T’s president of emerging devices. “It built a mobility device first.”

Incorporating those ideas wasn’t cheap. Best Buy plans to sell the Booklet for $299 with a two-year wireless contract, which in turn will cost $60 a month. The unsubsidized price (without 3G service) will be $599. That’s cheaper than the fees European carrier O2 is charging for the Booklet in Germany, but pricier than most netbooks. AT&T’s other netbooks–from Acer, Dell and
Lenovo
–currently sell for $150.

Nokia says the Booklet’s expensive materials (aluminum chassis, high-definition screen) and unique features justify the price premium. In fact, company representatives were more likely to compare the Booklet to
Apple’s
MacBook Air than to other netbooks, noting, for instance, that the Booklet is just 0.3 millimeters thicker than Apple’s sleek laptop. (Nokia doesn’t even use the term “netbook,” preferring “mini-notebook” instead.)

Nokia also views the Booklet’s Windows 7 software as an advantage. The device will be one of the first netbooks to run
Microsoft’s
new operating system.

Avi Greengart, research director for consumer devices at Current Analysis, thinks the combination will appeal to road warriors and business owners, but may not attract the average consumer. “People are not going to spend $60 a month to just use this on a couch or give their kids a computer,” he says. “Most consumers aren’t looking to have another recurring contract.”

Nokia and its partners are more optimistic. Best Buy Chief Marketing Officer Barry Judge said Tuesday that netbook sales are holding up despite the economy. AT&T’s Lurie said 22 million netbooks will sell this year around the world. The figures come from market researcher IDC. Lurie also noted that AT&T plans to introduce cheaper mobile broadband rates closer to the holidays, essentially lowering the cost of owning a Booklet.

Those projections explain why all the companies involved in the Booklet–Nokia, AT&T, Best Buy and Microsoft–intend to continue their collaboration. Future devices will synchronize better with Nokia phones and come loaded with Nokia’s “Comes With Music” subscription service, said John Wong, who led the Booklet design team at Nokia.